401(k) Pioneer Wants to Tune Up Plans Employee Benefit News (09/01) Vol. 15, No. 10 p.1; Lee, Karen
401(k) pioneer Ted Benna says he sees room for improvement in the employer-sponsored retirement benefit plan. Currently lobbying lawmakers to make adjustments to the 20-year-old plan, Benna would like regulatory officials and business groups to sanction the addition of structured portfolios that allow participants to invest and then over time automatically lower risk as they age. Under Benna's recommendations, 401(k) participants would be guaranteed an average 7 percent return over 20 years, and a cap would be added to charges of 75 basis points. Another proposal Benna is pushing would permit plan members to transfer their accumulated money to IRAs, thereby eliminating most administrative expenses for employers. He argues that these proposals would protect employers from the liabilities associated with sponsoring 401(k) plans and save workers the stress of making investing decisions with their savings. Although critics have not panned the proposal altogether, they say there are still some things to be considered. James Delaplane with the American Benefits Council says Benna is dead on about the problems most plan participants have with the available advice tools, but Delaplane believes Benna underestimates how much participants enjoy making and controlling their investment decisions.